Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide.
-
Wondering if Bouygues at €50.50 is offering good value or if the easy gains are already on the table? This breakdown is designed to help you make sense of the current price tag.
-
The stock has returned 35.8% over the past year and 11.7% year to date, even though it has slipped 3.2% over the last month and edged up 0.5% over the past week.
-
Recent coverage around Bouygues has focused on its role as a major construction and infrastructure group in France and abroad, together with its involvement in telecommunications and media. This mix of businesses can influence how investors think about the stock's risk profile and potential, which often feeds into short term price moves.
-
The company currently has a valuation score of 4/6. This means it screens as undervalued on four of six Simply Wall St checks. That sets up a closer look at different valuation methods next, along with a more complete way to think about what the market might be pricing in.
Approach 1: Bouygues Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a stock could be worth today by projecting the cash the company might generate in the future and then discounting those cash flows back into today's euros.
For Bouygues, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow sits at about €2.86b. Analyst style projections and subsequent extrapolations point to free cash flow of €2.39b by 2030, with intermediate years such as 2026 and 2027 sitting at €1.12b and €1.91b respectively. Simply Wall St uses analyst inputs for the nearer years and then extends those forecasts further out to complete the 10 year path.
When all these projected cash flows are discounted back, the estimated intrinsic value comes out at €65.73 per share. Against a current share price of €50.50, the model implies Bouygues trades at a 23.2% discount, which screens as undervalued on this DCF view.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Bouygues is undervalued by 23.2%. Track this in your watchlist or portfolio , or discover 233 more high quality undervalued stocks .
Approach 2: Bouygues Price vs Earnings
For profitable companies like Bouygues, the P/E ratio is a useful shorthand for what investors are currently paying for each euro of earnings. It ties directly to earnings power, which is usually the main driver of a stock's value over time.
What counts as a "normal" or "fair" P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher growth or lower risk can justify paying a higher multiple, while slower growth or higher risk often leads to a lower one.
Bouygues currently trades on a P/E of 16.22x. This sits above the Construction industry average P/E of 14.92x, and slightly below the peer group average of 16.62x. Simply Wall St also calculates a proprietary "Fair Ratio" of 21.49x for Bouygues. This is an estimate of the P/E that might be reasonable given factors such as its earnings growth profile, industry, profit margins, market cap and specific risks.
The Fair Ratio aims to be more tailored than a simple comparison with peers or the broad industry. It adjusts for Bouygues specific characteristics rather than assuming all companies deserve the same multiple. With the current P/E below the 21.49x Fair Ratio, the stock screens as undervalued on this metric.
Result: UNDERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 99 top founder-led companies .
Upgrade Your Decision Making: Choose your Bouygues Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Narratives bring your view of Bouygues to life by linking a clear story about its construction, telecom and media businesses to a set of revenue, earnings and margin forecasts. These then flow through to a Fair Value that you can compare with the current price to decide whether the stock looks expensive or cheap. All of this is available inside the Simply Wall St Community page, where Narratives are updated automatically when fresh news or earnings arrive. Different investors can sit at opposite ends of the spectrum, with one Narrative aligning with a Fair Value near €64.0 that leans on higher margins and a P/E around 20.5x, while another sits closer to €43.0 with more cautious assumptions around growth, profitability and P/E. This makes it easier for you to see which story you agree with and how that translates into a price tag.
For Bouygues, however, we will make it really easy for you with previews of two leading Bouygues Narratives:
Fair value in this bullish narrative: €64.00
Implied discount to this fair value versus the current €50.50 price: about 21.1% below the narrative fair value.
Revenue growth used in this narrative: 2.50% a year.
-
Bullish analysts see Bouygues improving margins and earnings as Equans scales, the construction backlog improves in quality, and higher value contracts support profitability.
-
The story leans on a mix of construction, telecom and green infrastructure exposure, with data centers, rail and energy transition projects expanding the revenue base over several years.
-
To line up with this fair value, you would need to be comfortable with earnings rising to €1.9b by 2029 and the stock trading on a higher P/E multiple of about 20.5x than today.
Fair value in this bearish narrative: €43.00
Implied premium to this fair value versus the current €50.50 price: about 17.4% above the narrative fair value.
Revenue growth used in this narrative: 1.07% a year.
-
Bearish analysts focus on climate regulations, higher capital and labor costs, and execution risk in complex projects as factors that could keep margins under pressure.
-
On this view, intense competition and cost pressures at Bouygues Telecom, plus possible project delays in construction and infrastructure, could hold back earnings progress.
-
To agree with this fair value, you would need to assume more modest revenue growth, earnings around €1.4b by 2029 and a P/E multiple closer to 17.1x, with current expectations seen as too rich.
If you want to go beyond the previews and see how the full range of Narratives line up with your own expectations for Bouygues, the Community section sets out each storyline, the assumptions behind it and the Fair Value that follows from those assumptions. This can help you decide which one feels closest to your own view of the stock.
To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Bouygues on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.
Do you think there's more to the story for Bouygues? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include EN.PA .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
